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Many consumers face much higher health insurance premiums and cost-sharing next year, as factors like increased use of GLP-1 drugs, the expiration of enhanced Obamacare subsidies and a high U.S. inflation rate push up costs across the healthcare system, experts said. The dynamic is stressing household budgets at a time when they're already strained by broader affordability issues, a key issue in the upcoming midterm elections. "They can expect to pay more," said Jonathan Oberlander, a professor of health policy and political science at the University of North Carolina at Chapel Hill. "Not just in terms of premiums — but also in terms of deductibles and copayments." What to expect in employer-sponsored plans Most Americans under age 65 — about 166 million people — get health insurance via employer-sponsored health plans. Employers generally subsidize the cost of health insurance for their workers by covering a large portion of their monthly premium payments. The average worker paid $6,850 of annual premiums in 2025, while employers contributed more than $20,000 per worker, according to KFF, a health policy research group. In 2027, the cost for employers to provide health benefits will rise by an estimated 8.2% per worker, on average — the largest increase since 2003, even after accounting for cost-reduction measures by employers, according to Marsh, a consulting firm. Similarly, WTW, a consulting firm, projects employer healthcare costs will rise 11.1% next year, the biggest jump in more than 20 years. Aon, another consulting firm, expects employer costs to jump 9.5% in 2027 — the fourth consecutive year of "elevated" healthcare costs, "extending one of the most sustained periods of health care inflation employers have faced in decades," the firm said in a press release in August. The upshot is that employers will likely pass on some or all of their additional healthcare costs to workers in 2027, according to health policy experts. Workers' total healthcare costs — including premiums and other out-of-pocket expenses — jumped by 7.9% in 2026 relative to the prior year, the fastest annual pace in a decade, according to Aon. The rate will likely be similar in 2027, according to Cristie Labus, a senior vice president in Aon's Health Solutions practice. Nearly 6 out of 10 employers — 59% — plan to make cost-cutting changes to health benefits in 2027, including by adding higher deductibles, according to Marsh. It polled more than 1,800 employers from June 10 to August 10. The move poses a tradeoff for workers, experts said. Higher deductibles may blunt premium increases, but they also mean that workers who must use their insurance are on the hook for bigger bills later if they get healthcare, they said. "There are other ways consumers get squeezed," said Matt McGough, an Affordable Care Act policy analyst at KFF. "It doesn't always just show up through the premiums." Growth in the cost of deductibles and family premiums has each outpaced inflation over the past decade, rising 54% and 53%, respectively, versus an overall inflation rate of 36%, according to KFF. What to expect in the ACA marketplace Another 19.2 million Americans are enrolled in a health insurance plan through the Affordable Care Act marketplace, according to figures published by the U.S. Department of Health and Human Services in June. Participants are typically self-employed, gig workers, early retirees, small business owners and others who don't get health insurance at work, or through federal programs like Medicare or Medicaid. Insurers that participate in the ACA marketplace proposed a median 15% increase in consumer premiums for 2027, according to a KFF analysis. This is the median increase across 276 insurers, based on their filings to state regulators detailing expectations for next year. If finalized, it'd be the second consecutive year of double-digit premium hikes for Obamacare enrollees, KFF said. Last year's median nationwide proposed increase was 18% — and the median finalized rate was 20%, it found. In all, enrollees face premiums that are 30% to 40% higher over just a two-year period, McGough said. In most cases, consumers are largely insulated from that premium shock, experts said. Many Obamacare enrollees receive premium tax credits — also known as premium subsidies — that reduce their health insurance premiums. Recipients' total premiums are capped at a certain percentage of their income — and the federal government makes up the difference. "The vast majority of people are subsidized in the marketplace," Oberlander said. "When premiums go up like this, they are essentially held harmless." There's a caveat, though: ACA enrollees whose incomes are over 400% of the federal poverty line are on the hook for the full, unsubsidized insurance premium. There are other ways consumers get squeezed. It doesn't always just show up through the premiums.Matt McGoughAffordable Care Act policy analyst at KFF Such households — individuals earning more than roughly $64,000 or a family of four earning $132,000 in 2026, for example — are ineligible for premium subsidies, following the expiration of enhanced premium tax credits at the end of last year. Roughly 7% of Obamacare enrollees — about 1.6 million people — had incomes over 400% of the federal poverty line in 2025, according to the Bipartisan Policy Center. Why premiums are rising sharply The sharp increase in healthcare costs for employers and workers comes after about two decades of "relative moderation" in health spending growth in the U.S., Oberlander said. Of course, it may not have felt like a subdued growth rate for consumers, he said. That's because the cost baseline was already so high, he said. "Nobody really celebrated what happened — but it could have gone up much more than it did for consumers," he said. Oberlander said it's unclear if the upswing over the last two years signals the beginning of the end of an era of moderation in health spending growth, which "would be a big deal." There are many reasons for the sharp uptick in health costs. Perhaps the most impactful recent development is the use of GLP-1 medications for weight management, said Sunit Patel, U.S. chief actuary for health and benefits at Marsh. The firm estimates "rising GLP-1 utilization" accounts for 1 percentage point of overall employer cost growth for 2027, he said. Some employers seeking "immediate cost relief" have chosen to drop coverage for GLP-1 drugs for next year, he said. Persistently high general inflation in the U.S. has also pushed up costs across the healthcare system, McGough said. Insurers' costs are going up, and they compensate for that via higher prices, he said. Labor shortages in healthcare also drive up wages, exacerbating inflation, he said. Consolidation in health services — for example, large hospital systems buying up smaller medical practices — also pushes up prices, since larger organizations have more negotiating power to set reimbursement rates with insurers, McGough said. In the Obamacare marketplace, the expiration of enhanced premium subsidies and other policies — such as those included in the so-called "big beautiful bill" passed by the Republican majority in Congress — have led insurers to raise premiums for enrollees, McGough said. Those policies have made it more expensive for consumers to keep their insurance, he said. They can expect to pay more.Jonathan Oberlander Most ACA enrollees saw their insurance premiums jump from 2025 to 2026 after the expiration of enhanced premium tax credits. Premium payments from ACA enrollees jumped by an average of 58%, to $178 per month in 2026 from $113, according to KFF. Average ACA marketplace deductibles increased by 37%, or $1,027 per person, to a record high of $3,786 in 2026, it found. Insurers are raising premiums for 2027 because they expect many younger, healthier people to drop their insurance plans, leaving behind a pool of older, sicker people who are more costly to insure, experts said. Why health costs may matter in elections Rising health costs may have an impact on how households choose to vote in the upcoming midterm elections, which are about a month away, and the 2028 presidential election, Oberlander said. "If you look at surveys, people are very upset about affordability in healthcare and their ability to afford healthcare," he said. A KFF survey in January showed that 43% of voters said the cost of health care will have a "major" impact on which candidate they support in the midterms. Democrats have a double-digit edge over the Republicans regarding who voters said they trust to address the cost of health care (40% vs. 27%), according to the KFF survey. "I think it will be a bigger issue in 2028 [during the presidential election] than it is in 2026, only because there are so many other issues right now, including the Iran war," Oberlander said.
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